Lighting Tax Deduction The Energy Efficient Commercial Buildings Tax Deduction

EPAct 2005s Commercial Buildings Deduction provides the entire cost of energy-efficient interior lighting to be deducted in the year it is placed in service, subject to a cap. This Deduction is achievable using commercially available lighting technologies and good lighting practice aimed at exceeding the national energy standard. The owner claims the Deduction using standard tax forms.

To earn the accelerated tax deduction, the objective is to increase efficiency beyond todays energy standard. All buildings except warehouses must achieve lighting power density at least 25-40% lower than ASHRAE/IES Standard Warehouses must having lighting power density at least 50% lower

For all buildings except warehouses, the Interim Lighting Rules offer an accelerated tax deduction that is the lesser of: The complete cost of installing energy- efficient interior lighting $0.30 to $0.60/sq.ft. proportional to lighting power savings of 25-40%

For warehouses, the Interim Lighting Rules offer an accelerated tax deduction that is the lesser of: The complete cost of installing energy- efficient interior lighting $0.60/sq.ft.

Lighting power savings are based on exceeding the minimum requirements of ASHRAE/IES , the standard energy code. Ties tax deduction to standard lighting practice Objective is to reduce power below minimum requirements Mandatory controls provisions of Standard must be met, increasing efficiency

Lighting must be interior lighting Building must be located in United States or its territories Cost must be otherwise depreciable Project must be within scope of ASHRAE/IES 90.1 Standard Project must be certified to reduce lighting power density by 25-40% below Standard

All mandatory controls provisions in Standard must be met Bi-level switching must be installed in all occupancies except hotel and motel guestrooms, store rooms, restrooms, lobbies Minimum IES-recommended light levels must be achieved

The effective timeframe of this provision is January 1, 2006 through December 31, 2007, although Congress may extend it.

Many technologies can be used to achieve the efficiency targets, such as: T8 lamps + Super T8 lamps High-efficiency electronic ballasts Indirect lighting High-efficiency fixtures Low-wattage metal halide lamps Compact fluorescent T8 and T5HO hi-bay fixtures

Many technologies can be used to achieve the controls requirements, such as: Occupancy sensors Lighting automation panels Building automation systems Photosensors (bi-level switching) Manual switches (bi-level switching)

Lighting Tax Deduction The Energy Efficient Commercial Buildings Tax Deduction